More good news Nevgold Executes Option to Acquire the Nutmeg Mountain Gold Project and Announces Strategic Investment by Goldmining Inc.
Vancouver, British Columbia, June 14, 2022 (GLOBE NEWSWIRE) -- NevGold Corp. (“NevGold” or the “Company”) (TSXV:NAU) (OTCQX:NAUFF) (Frankfurt:5E50) is pleased to announce execution of an option agreement (“the Option”) to acquire the advanced exploration stage Nutmeg Mountain Gold Project (“the Project” or “Nutmeg Mountain”, also known as Almaden) in Idaho from GoldMining Inc. (“GoldMining”) which hosts a historical resource completed in 2020 of 910,000 Indicated ounces of gold, and 160,000 Inferred ounces of gold. GoldMining will also make a strategic investment (“the Investment”) in NevGold of C$1 million on closing of the option agreement, and further has committed to a lead order of C$1.25 million in a future financing.
Key Highlights
Under a binding option agreement among NevGold, GoldMining, and their respective U.S. subsidiaries:
- In consideration for the grant of the Option, NevGold will issue 4,444,444 common shares to GoldMining at a price of $0.675 per share, representing C$3 million of value based on the 30-day volume-weighted average price of NevGold shares. GoldMining will become a large, cornerstone, strategic investor of NevGold with an approximate 10.6% interest;
- Concurrently with the above issuance, GoldMining will make the initial Investment of $1 million, subscribing for 1,481,481 NevGold shares at a price of $0.675 per share, and commits to a further lead order in an amount up to C$1.25 million in a future financing by NevGold completed by November 30, 2022;
- In order to exercise the option, NevGold will pay the following amounts, or at its discretion, issue shares to GoldMining with an equivalent value, on the following schedule:
- January 1, 2023: C$1.5 million
- July 1, 2023: C$1.5 million
- January 1, 2024: C$3.0 million
- In order to exercise the Option, NevGold will also be required to make qualifying expenditures on the Project totalling C$2.25 million:
- $1.5 million on or before June 1, 2023
- a further $0.75 million on or before December 31, 2023
- On completion of the total C$9.0 million in equity issuances and/or payments to GoldMining and total C$2.25 million in qualifying expenditures by January 1, 2024, NevGold would own 100% of the Nutmeg Mountain Gold Project
- NevGold commits to a schedule of future success-based contingent payments totalling C$7.5 million to GoldMining, payable in cash or shares at the election of NevGold:
- C$0.5 million on completion of a Preliminary Economic Assessment (PEA) on the Project
- C$2.5 million on completion of a Preliminary Feasibility Study (PFS) on the Project
- C$4.5 million on completion of a Feasibility Study (FS) on the Project
- NevGold will enter into an Investor Rights Agreement with GoldMining with customary rights including pre-emptive equity participation rights and a right to appoint a Board member
NevGold CEO, Brandon Bonifacio, comments: “NevGold is extremely pleased to enter the option agreement to acquire Nutmeg Mountain. The asset has attractive scale with a historical resource completed in 2020 of 910,000 Indicated ounces of gold, and 160,000 Inferred ounces of gold starting at surface, and significant exploration upside, while also being located in a premier jurisdiction with excellent infrastructure near site. We see many opportunities to extract value at Nutmeg Mountain like we have at Limousine Butte over the past 12 months, and we see the value extraction roadmap as being very similar. This transaction also adds the benefits of a new strategic partner and investor, especially with a long-term growth focused, well-established team like GoldMining. We look forward to the next chapter of NevGold as we continue to build one of the marquee gold resource and exploration platforms in the Western USA.”
GoldMining CEO, Alastair Still, comments:“We are excited to have formed a partnership with NevGold to share in the potential benefits as they conduct work to grow and develop the Nutmeg Mountain Project. GoldMining is also encouraged by the continued exploration success at Limousine Butte in Nevada, and the upside potential of the other assets within the NevGoldportfolio.”